The Times suggests that the tentative outline of a Brexit deal covering financial services has been informally agreed.

Whilst this suggestion is still very much speculation, if correct, it suggests that some form of deemed or "grandfathered" equivalence may be adopted by the EU and UK, recognising the equivalence of each other's regulatory regimes for the purposes of the so-called "third country" provisions in various European financial services directives and regulations. If true, financial services firms may take some comfort from the potential availability of third country access rights under MiFID II and other EU financial services legislation.

However, it is important to note that "equivalence" still falls short of the existing passporting regime the UK enjoys as a member state. Whilst equivalence may well facilitate delegated access models (such as where a fund manager delegates investment management to a UK entity from within the EU27), it would likely not allow the degree of direct market access currently enjoyed by UK firms.

UK financial services companies will be able to operate as they now do in Europe. The EU will accept that the UK has “equivalent” regulations to Brussels and therefore be allowed market access.